Written by Shariah Markets Screening

Halal Stocks in INDIA: Your Ultimate Guide to Shariah Compliant Investments in 2023

Halal Stocks in INDIA Market as on 18th October 2023

Islamic Finance in India

Investment funds are not a very new topic. However, if you follow Islam, then you might have well heard of the term Shariah funds. Are you aware of its true meaning?

We will tell you! In this blog, we will dig deeper into all about Shariah funds and make you aware of the various terms associated with it. Let us start from the very beginning.

Shariah Compliant Stocks in India.

Shariah compliant funds refer to all those investment funds and options that work along the lines of the Shariah law and regulations stipulated by Shariah Scholars.

What you need to know about them is that they are invested in a list of companies that comply with the set shariah compliant norms and standards.

These funds take into consideration the principles laid down by Shariah Boards and screen the funds based on whether they follow the same or not.

It is not a very new concept. However, yes, it has become very popular recently.

A few basic requirements of these funds include not going for those stocks of investments that generate income from the selling of pork, alcohol, drugs, gambling or sale of weapons and ammunition or any other activities opposing the shariah principles.

In India, there has been a rising popularity of Shariah compliant stocks. So, now you have a basic idea of what Shariah compliant funds are. Let us now look at why they are important.

Why Shariah Compliant Stocks?

Generating income from making investments in shares or funds is the goal of investments in general but If you need to generate income that should be HALAL then you need to find out Shariah Compliant Stocks or Shariah Compliant funds where you can invest in them to earn Halal Income.

Investing in Shariah Compliant stocks or Shariah Compliant funds encourage investors to keep your investments Islamic and keep you away from Haram activities prohibited by Islam like sale of pork products, arms, ammunition, alcohol, drugs, etc.

Not only does it help you stick to the principles of Islam in all aspects, but it also enables you to participate in earning money for you and to participate in the development of the overall economy for the country.

What is the Shariah screening process for stocks?

Shariah Screening process consists of the below

1. Sector Based Screening

2. Accounting Based Screening

For more information about screening, please read Quick Tips – What are Shariah Compliant Stocks?

In brief, if any stock passes the sector based screening criteria as well as Accounting based screening criteria, the investments in such stock are Halal. If any income earned from Non-Islamic activities, the same needs to be purified and given to the charity.

List of top 10 Companies in INDIA by Market Capitalization and their Shariah Compliance status

(as on 18th October 2023)

Company Market CapShariah ComplianceCompliance Risk Factor
Reliance Industries Ltd₹15.55THalalLow (Not likely to turn Non Compliant)
Tata Consultancy Services Ltd ₹12.78THalalLow (Not likely to turn Non Compliant)
HDFC Bank Ltd ₹11.54TNon HalalLow (Not likely to turn Compliant)
ICICI Bank ₹6.53TNon HalalLow (Not likely to turn Compliant)
Infosys ₹5.92THalalLow (Not likely to turn Non Compliant)
Hindustan Unilever Ltd₹5.86THalalLow (Not likely to turn Non Compliant)
Bharti Airtel₹5.52TNon HalalLow (Not likely to turn Compliant)
ITC₹5.46TNon HalalLow (Not likely to turn Compliant)
SBI₹5.02TNon HalalLow (Not likely to turn Compliant)
Bajaj Finance₹4.70TNon HalalLow (Not likely to turn Compliant)

How Many Shariah Compliant (Halal) Stocks are there in India?

The need for Halal Investments in India is on the rise. Many people need to know how to get the shariah screened compliant companies to invest in and from where.

The numbers of Shariah compliant stocks in India are huge and Halal investors in Indian equities have several options to invest in different companies. Thus they want to know how many shariah compliant stocks available for trading in.

Around 47% of Indian companies listed on the Stock exchanges are Shariah compliant.

Shariah Compliant Stocks in India (Hover to view more details)

If you need to know the shariah status of any individual stock, you need to download “Islamicly” app which will enable you to get the shariah status of any stock not only Indian stocks but global stocks also .

The NSE and BSE both has Shariah Compliant indices as below;

The S&P BSE 500 Shariah Index – This index includes 500 companies screened out for shariah compliant investment with help of S&P Shariah Screening Partner “Ratings Intelligence

NIFTY Shariah Index – it has incorporated 3 shariah indices namely: the top 50, top 25 and top 500 companies. There are three main Shariah indices served by NSE with the co-ordination with TASIS – a shariah screening parent.

Shariah Compliance of various business sectors in USA.

Listed Companies in the USA can be classified into 71 business sectors, broadly. Sector wise Shariah compliance of companies listed in the USA can be seen below:

Shariah Compliant Stocks in INDIA- Sector Wise

(as on 18th October 2023)

Row LabelsCompliantNot CompliantGrand Total
Advertising123
Apparel/Accessories12820
Appliance & Tool347
Auto & Truck Manufacturers11
Auto & Truck Parts123
Basic Materials446323769
Beverages (Nonalcoholic)145
Biotechnology & Drugs7613
Broadcasting & Cable TV11
Business Services11415
Capital Goods298312610
Chemical Manufacturing6814
Chemicals – Plastics & Rubber134
Coal022
Communications Equipment101
Communications Services123
Computer Hardware112
Computer Networks101
Computer Services011
Constr. – Supplies & Fixtures101
Constr. & Agric. Machinery303
Construction – Raw Materials437
Construction Services5611
Consumer Cyclical257315572
Consumer Financial Services1910
Consumer/Non-Cyclical162164326
Containers & Packaging145
Crops628
Electric Utilities224
Electronic Instr. & Controls336
Energy262753
Fabricated Plastic & Rubber538
Financial26400426
Fish/Livestock325
Food Processing10919
Footwear112
Healthcare20562267
Healthcare Facilities213
Hotels & Motels123
Investment Services53641
Iron & Steel4812
Jewelry & Silverware224
Major Drugs011
Medical Equipment & Supplies202
Metal Mining303
Misc. Capital Goods224
Misc. Fabricated Products235
Misc. Financial Services11617
Misc. Transportation246
Motion Pictures033
Natural Gas Utilities101
Oil & Gas Operations347
Paper & Paper Products167
Personal & Household Prods.123
Personal Services011
Printing & Publishing022
Printing Services011
Rajputana Investment And Finance Ltd011
Real Estate Operations8715
Recreational Activities022
Rental & Leasing123
Retail (Apparel)101
Retail (Department & Discount)011
Retail (Grocery)202
Retail (Home Improvement)112
Retail (Specialty)022
Services196261457
Software & Programming191029
Technology252113365
Textiles – Non Apparel191635
Transportation374885
Utilities223557
Water Transportation011
Grand Total210322894392

Is Investment banking allowed in Islam?

Yes, investment banking is permitted and allowed in Islam. However, the only thing to be kept in mind is that none of the investments must carry any interest. Basically, Islam deals with ethical investment only. This also means avoiding any association with companies that are dealing with objectionable items, as mentioned above.

How do I do Halal investing as a beginner?

As a beginner, you need to be a little cautious about how you invest in the shariah compliant funds. Firstly, you have to be sure that the stocks or the funds are under the Shariah Law.

You have to have a proper strategy before investing your hard earned money anywhere. You can take help from any halal financial experts or advisors.

Usually the first step is opening a trading account and then going ahead and starting your portfolio. You may get in touch with us too for any queries or help regarding the same.

Are there any conventional securities that are Halal to trade?

Before you select any particular stock or fund to invest in, you must check certain criteria that will help you decide better for yourself. You have to be fully aware of these criteria to decide whether the stock is Shariah compliant or not.

A few checks include the nature of business and other financial parameters. The first criterion includes a check on whether the company deals with the production or sales of items like tobacco, drugs, alcohol, Pork, Gambling, Pornography and Financials etc. The later criterion looks into parameters like Debt to Market Cap, Cash to Market Cap etc.

Is investing in stock halal? Is the income from stocks halal?

As we have discussed above, investing in stocks is halal as long as it doesn’t associate with any company dealing with prohibited activities as explained.

What are the halal ways I can invest my income?

You can do proper research on the various types of stocks, funds, and shares available in the investment market. These investment opportunities have proven to be very beneficial to increase your income.

This is all the basic information that you would need about the Shariah compliant funds. Once you are all set with your decision to invest in the same, you must read the market carefully to make out the best investment options for you.

We hope that our article has helped you in understanding this concept. In case you are flooded with more doubts, do reach out to us.

Islamicly App

Islamicly App is your one stop destination that can help you manage your investments in a Shariah compliant manner.

This unique app provides the latest Shariah status of listed stocks in India as well as the world over. It enables users to create portfolios, track Shariah compliance status changes, calculates the purging amount (Dividend Purification). You can access forums and participate in stock related discussions as well as general discussions. It also provides current prices of each stock as well as the top gainers and losers in relation to Shariah and much more.

Islamicly also has a web/desktop version that allows you to manage your Shariah compliant investments on the web and has many more advance features. So, what you are waiting for? Download the app or access the web portal Today.

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Last modified: November 30, 2023
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